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March 30, 2015

This week’s likely top stories: Bolivia holds local elections; Cuba and the U.S. to discuss human rights; Caribbean Bitcoin exchange launches; UNASUR head urges closing of U.S. military bases in the region; Chile rejects Bolivian aid for flood victims.

Bolivia’s MAS Party Loses La Paz in Local Elections: Bolivian citizens elected local government leaders on Sunday, with President Evo Morales’ party, Movimiento al Socialismo (Movement Towards Socialism—MAS) winning most governments, according to unofficial results. MAS won four out of nine provinces (Pando, Potosí, Oruro and Cochabamba) outright, and led in two other provinces that will now advance to a second round of votes on May 3, due to a close race. However, MAS lost La Paz, as well as Santa Cruz and Tarija provinces. Félix Patzi, from the Solidaridad y Libertad party (Solidarity and Liberty) secured approximately 52 percent of the votes for the governorship of La Paz. Official results are expected later on Monday.

U.S. Confirms Human Rights Meeting with Cuba: On Friday, a U.S. government spokesperson confirmed that U.S. and Cuban officials will meet on Tuesday, March 31 in Washington, DC for a preliminary discussion on human rights. The undersecretary of state for democracy, human rights and labor, Tom Malinowski, will lead the U.S. delegation. Pedro Luis Pedroso, deputy director of multilateral affairs and international law at the Cuban Foreign Ministry, said that the Cuban delegation will detail the country’s current and past successes in the area of human rights. This will be the fourth round of talks since the re-establishment of ties between the two countries. U.S. President Barack Obama hopes to re-open embassies before the Summit of the Americas in Panama on April 10-11.

Caribbean Bitcoin Exchange Launched: The Caribbean Bitcoin exchange “Bitt,” which is based in Barbados, was launched on Monday. Bitt, powered by digital currency exchange software company AlphaPoint, will be operating after confirming $1.5 million in seed funding from venture capital group Avatar Capital. The exchange will allow customers to trade in 11 fiat currencies, including the U.S. dollar and the euro. CEO Gabriel Abed praised the positive impact that Bitt will have. “By facilitating trade between traditional and digital currency markets, Bitt is creating the platform for very low-cost international commerce and remittance between the people who need it most—the millions of unbanked and underbanked citizens in the Caribbean,” he said.

March 26, 2015

On March 25, Chile’s Interior Ministry declared a state of emergency for cities in the country’s northern Atacama and Antofogasta regions after flash flooding from the worst rains in two decades left at least four people dead and 22 missing. Meanwhile, high temperatures and strong winds in southern Chile are making it harder for authorities to fight forest fires that have raged for weeks and have affected over 11,000 acres in three protected areas.

Overflowing rivers in northern Chile forced residents out of their homes and onto roofs, while mudslides cut off road access to several small towns. Approximately 1,500 people had to take refuge into shelters. On Wednesday evening, 48,000 people were without drinking water and 38,500 were without electricity.

In response to the flooding, President Michelle Bachelet traveled to Copiapó in Atacama on Wednesday evening after authorizing the armed forces to assist in rescue operations.

March 20, 2015

On Thursday, Chilean president Michelle Bachelet announced new measures to curb corruption in Chile’s public sector. Speaking from the government palace La Moneda in Santiago, Bachelet declared that all public sector officials will be required to annually submit a declaration of financial assets, with the first submission deadline set for April 30, 2015. Bachelet also plans to amend the constitution to mandate that former presidents continue to file the declaration of assets even after they have left office. Bachelet asserted that she will make the first move by declaring her own assets.

While outlining the plan, Bachelet remarked that “solutions must be at the institutional level to keep our democracy strong. The Chilean state is based on public trust, respect for institutions and that pact of trust must be renewed.”

The declaration comes amid a series of political scandals that have troubled the country in recent months, including a case involving Bachelet’s son, Sebastián Dávalos. Dávalos resigned from his position as socio-cultural director of the presidency in February following allegations that his family received preferential treatment for a private-sector bank loan they sought to purchase land. In a separate high-profile case, several political figures that founded the financial company Penta Group were detained earlier this month on charges of tax fraud and bribery. A third recent case of corruption involves the Chilean fertilizer group SQM, which is accused of illicit campaign financing.

Bachelet’s plan received mixed responses. Opposition leaders said the plan did not go far enough to fight corruption. Eduardo Engel, president of Chile’s anti-corruption board, argued that while the plan sends a strong signal, it would not be the end of the corruption battle. “This is a very powerful first step […] but it must only be seen as the first step and not as something that completely solves the problem.”

Colombia and FARC to Remove Landmines: The Colombian and the FARC guerrilla group reached an agreement on Saturday to work together to clear the country of landmines and explosive devices. Their joint statement was read by Cuba and Norway, the two guarantor countries for the peace process, and the Norwegian People’s Aid (NPA) will assist in the de-mining efforts. This weekend’s agreement marked important progress in the negotiations; for the first time, high-level military commanders were present, and the removal of mines and explosives is a major step toward disarmament. Over 11,000 Colombians have been hurt or killed by landmines in the last 15 years.

Peru Recalls Ambassador to Chile: On Saturday, Peru recalled its ambassador to Chile over spying accusations. Last month, the Peruvian government announced that three Peruvian naval employees were being investigated for allegedly disclosing military information to Chile. On February 20, Peruvian President Ollanta Humala sent Chile a diplomatic note requesting an answer regarding the claims, although Peru has not yet received a response. Chilean Foreign Minister Heraldo Muñoz stated that Chile “does not promote or accept acts of espionage in other states or its own territory.” Peruvian Prime Minister Ana Jara claimed that Peru will not send its ambassador back to Chile until the issue is addressed. Chile and Peru have long harbored tensions over their borders.

Citigroup Inc. to Sell Central American Operations: Citigroup Inc. may soon sell its Central American retail units to Banco Popular Español S.A., which is based in Madrid, Spain. According to a source’s comments on Saturday, Citigroup aims to sell its retail operations in Costa Rica, El Salvador, Guatemala, Nicaragua, and Panama in an effort to leave markets yielding low revenues and to streamline operations. Citigroup hopes to sell for $1.5 billion. The deal is not yet finalized and is subject to change. Spokesmen for both banks declined comment on the matter.

Puerto Rico Proposes Plan to Combat Tax Evasion: Puerto Rican Governor Alejandro García Padilla is supporting a new plan to impose a 16 percent value-added tax (VAT), in an effort to reduce the territory’s $73 billion public debt. The plan, which is currently being considered by lawmakers, would replace Puerto Rico’s current tax rate of 7 percent and would curb tax evasion on the island. Pending approval, producers would pay the VAT on raw materials, and include it in the price given to retailers, and the VAT would eventually be paid by consumers. Charging the VAT at each stage in the sales process would ensure proper collection. Currently, Puerto Rico’s informal economy is estimated to be worth $16 billion, a figure representing approximately 25 percent of the GDP. García Padilla is expected to make an announcement regarding the plan today.

Chilean Corruption Scandal Racks Opposition Party: After court hearings last week, a tax auditor, a former government official and four executives from the Penta Group, one of Chile’s largest financial groups, were jailed on Saturday for tax fraud, bribery and money laundering. Ten defendants were implicated in the scandal, including two tax officials and two politicians from the Unión Demócrata Independiente (Independent Democratic Union—UDI) opposition party. In a public declaration on Monday, La Superintendencia de Bancos e Instituciones Financieras (Superintendency of Banks and Financial Institutions—SBIF) announced that the Penta executives, including owners Carlos Délano y Carlos Eugenio Lavín, would be unable to maintain their positions as shareholders in the company.

February 23, 2015

Allegations of Espionage Threaten Peru-Chile Relations: Chilean Minister of Foreign Affairs Heraldo Muñoz announced on Sunday that Chilean Ambassador Roberto Ibarra would not return to his post in Peru in light of the country’s espionage complaints against Chile. On Friday, Peruvian Ambassador Francisco Rojas Samanez was recalled to Lima after Peruvian prosecutors claimed that several Peruvian naval officers sold confidential information about their navy’s surveillance of fishing boats to Chilean navy officials. Two of the naval officers implicated in the leaks have been placed in detention. Muñoz has stated that Ibarra is “in consultations” to craft a response to the allegations “with calmness and without harsh remarks.” Peruvian president Ollanta Humala called on Chilean president Michelle Bachelet to issue assurance “that such espionage activities will never be repeated.”

Panama to Mediate Conflict Regarding Hydroelectric Dam: The Panamanian government formally announced negotiations on Saturday to address growing conflict over the construction of the Barro Blanco hydroelectric plant on the Tabasará River, which is now 95 percent complete. A neighboring Indigenous community, the Ngäbe Buglé, is demanding cancellation of the $225 million project due to environmental concerns, and local protests stalled construction work on February 9. Negotiations over the dam are to be facilitated by the UN in the district of Tolé, 400 kilometers west of Panama City, and led by a high-level committee headed by the vice president and foreign minister of Panama, Isabel de Saint Malo de Alvarado. Panamanian President Juan Carlos Varela expressed faith in the negotiations, saying, “we will do whatever we have to do in the negotiations to seek a solution. I have a lot of confidence and we will take the time that is required.” However, the president of the Regional Congress of the Traditional Ngäbe Buglé, Toribio García, said the community’s opposition to the dam is “not negotiable” and announced that they would not participate in the negotiations.

Guatemala to Eliminate Customs Duties with Honduras: Guatemalan President Otto Pérez Molina set a deadline of mid-December 2015 to eliminate customs duties between Guatemala and Honduras in an effort to improve both countries’ trade. Guatemalan Foreign Affairs Minister Carlos Raúl Morales also confirmed that three shared land border crossings between the two countries could also be phased out, and expressed hope that El Salvador and Nicaragua would eventually join the partnership. The plan is part of a coordinated response to the humanitarian crisis of thousands of migrants fleeing to the U.S. border in the summer of 2014. In September 2014, the three Northern Triangle countries of El Salvador, Guatemala and Honduras formed the Alliance for Prosperity in the Northern Triangle, a joint development plan that included eliminating customs to promote peace and prosperity in the region. The Northern Triangle’s combined population is 29 million and has the highest poverty levels in Latin America. The plan has received support from the Obama administration.

February 11, 2015

The Unión de Naciones Suramericanas (The Union of South American Nations—UNASUR) and the Banco de Desarrollo de América Latina (Latin American Development Bank—CAF) announced plans on Tuesday to develop thefirst fiber optic cable exclusively financed by Latin American institutions.

The creation of the proposed Red de Conectividad Suramericana para la Integración (South American Connectivity Network for Integration) could reduce South America’s reliance on foreign businesses for the infrastructure needed to connect to the Internet, subsequently lowering costs of access as well as increasing connectivity speeds.

UNASUR Secretary-General Ernesto Samper explained in a press conference in Montevideo, Uruguay, that Internet speed in South America is significantly slower than in other countries because of the challenges of broadband connectivity in the region, causing prices to surge up to 20 times higher than in developed countries.

There are an estimated 22.3 million Internet users in Latin America, accounting for 54.7 percent of the region’s population. Samper expressed concern about the digital divide in South America, stating that “one who is not connected is lost” and that Latin America “needs to generate value added processes and create autonomous communications highways to strengthen its independence and cyber defenses.”

CAF has pledged an initial investment of 1.5 million dollars for the first phase of the project, which will involve an in-depth analysis of the current Internet technologies in each South American country to determine how they will incorporate existing cables into the future fiber optic grid. The vice president of CAF, Antonio Sosa, stated that the study would focus on demographics, technical issues and institutional framework in each country.

February 2, 2015

Likely top stories this week: the deadline passes for children of undocumented immigrants to apply for legal status in the Dominican Republic; U.S. companies stand to lose billions of dollars in Venezuelan currency losses; Michelle Bachelet moves to end Chile’s abortion ban; relatives of Mexico’s 43 missing students meet with UN officials in Geneva; Puerto Rico’s economy continues to suffer.

Children of Immigrants to Lose Legal Status in the Dominican Republic: A deadline for the children of undocumented immigrants in the Dominican Republic to register for legal status expired on February 1 at midnight, potentially leaving some 200,000 people stateless—most of them of Haitian descent. The deadline was part of a May 2014 law designed to normalize the status of the children of undocumented immigrants in the D.R. after a September 2013 court ruling revoked the citizenship of Dominican-born children of undocumented immigrants, sparking an international outcry. Thousands of people affected by the law formed long lines to register themselves in the past weeks, but it is unclear if the government will extend the deadline. Human rights groups have harshly criticized the government’s failure to adequately publicize information about the law, and so far, only 5 percent of the estimated 110,000 people eligible to apply for legal status have been able to do so. Meanwhile, the government of the Bahamas has also introduced strict new requirements that have disproportionately affected Haitian immigrants and their children.

U.S. Companies Losing Billions in Venezuelan Currency: At least 40 U.S. member of the S&P 500, including General Motors and Merck & Co Inc., stand to lose billions of dollars in Venezuelan currency losses, a Reuters analysis shows. The American automotive and pharmaceutical giants together have at least $11 billion in assets in Venezuelan bolivars. Companies like Clorox have already exited the South American nation due to continued devaluation, insecurity and unfavorable conditions. While the official exchange rate is 6.3 bolivars to the dollar—with government-set rates SICAD 1 and SICAD 2 at 12 and 50 bolivars to the dollar, respectively—the black market rate registered at 190 bolivars to the dollar on Sunday.

Bachelet Proposes End to Total Abortion Ban in Chile: Chilean President Michelle Bachelet announced on Saturday that she would submit a bill to Congress that would end Chile’s total ban on abortions. The bill would permit abortions up to the 12th week of pregnancy in the cases of rape, a life-threatening pregnancy, or if the fetus will not survive—and abortions would be permitted until the 18th week for girls aged 14 and younger. Chile’s total ban on abortions began in 1989, a legacy of the 1973-1990 military dictatorship of Augusto Pinochet. The anti-abortion lobby and Catholic Church remain a powerful influence in Chile, but some 15,000 to 160,000 abortions are still carried out in the country each year. “Facts have shown that the absolute criminalization of abortion has not stopped the practice,” Bachelet said. Chile, along with El Salvador, the Dominican Republic, Nicaragua, Honduras, Haiti, and Suriname are the only countries in Latin America that outlaw abortion under any circumstance.

Relatives of Mexico’s Missing Students Rally in Geneva: Parents and relatives of the 43 Mexican students who went missing after a protest in Iguala, Mexico in September are in Geneva this week meeting with the United Nations Enforced Disappearances Committee. To date, no one has been tried in the case of the missing students. The parents reject Mexican officials’ claim that the students were killed and burned in a landfill by members of the Guerreros Unidos gang, asserting that the government is holding the students illegally. At least 23,721 people are missing in Mexico, according to official figures. The Mexican National Human Rights Commission will present a report to the UN today, requesting that the Enforced Disappearances Committee make recommendations to Mexico’s government.

Puerto Rico Enters Eighth Year of Recession: The economically battered U.S. commonwealth saw its economic activity drop 1.4 percent between December 2013 and December 2014. Puerto Rico is in its eighth straight year of recession, with over $73 billion in public debt. Puerto Rican government officials met with the Federal Reserve Bank of New York in January to discuss strategies for strengthening the territory’s economy. The Puerto Rican House approved the borrowing of an additional $225 million for public works last Thursday.

January 29, 2015

After a four-year debate, the Chilean Senate has passed a bill allowing for same-sex unions. The law passed on Wednesday with a vote of 25 to 6, with three abstentions.

Under the new law, called the Acuerdo de Unión Civil (Civil Union Accord—AUC), same-sex couples are afforded many of the rights of married couples, including health, inheritance and pension rights. The law was originally proposed under the Sebastián Piñera administration, coined the Acuerdo de Vida en Pareja (Couple Life Agreement—AVP), and has been advocated for publically by President Michelle Bachelet, who promised to pass the AUC during her latest presidential campaign.

“We’re very happy that the State recognizes, for the first time, that same-sex couples also constitute a family and deserve protection,” said Luis Larraín, president of the LGBT rights group Fundación Iguales.

While the bill has now passed the Senate and the House of Representatives (on a vote of 78-9), it still needs to be approved by President Michelle Bachelet and then will go to the Constitutional Court. Upon its final approval, Chile will be one of three South American countries to allow same-sex civil unions, along with Colombia and Ecuador. Brazil, Argentina and Uruguay allow same-sex marriage.

Taking the next step to same-sex marriage remains unlikely in Chile, which has historically conservative laws based on Roman Catholic ideology. Divorce was illegal until 2004, and Chile is still one of the few countries in Latin America where abortion for any reason is illegal.

Muñoz’s comments came after Bolivian President Evo Morales’ statement on Sunday that Pope Francis had requested documentation about the border dispute. On Monday, after a meeting with the advisory committee for the legal case, Muñoz said, “Chile has not accepted in the past, does not accept and will not accept any mediation in a matter that is absolutely bilateral, that concerns only Chile and Bolivia. Chile will never consider, does not accept nor will accept ceding territory under pressure or through any form of mediation. This is crystal clear for us, even more so as there is a case in The Hague.”

There have been heightened tensions recently regarding the longstanding conflict, with Morales asserting at the end of December 2014 that Bolivia would recover its access to the sea. Meanwhile, Muñoz published a piece in the Brazilian publication Folha de São Paulo entitled “What the Bolivian Lawsuit is Hiding.”

November 14, 2014

Beyond seeking to deepen trade links with Asia, the leaders of Chile, Peru and Mexico—the three Latin American member states of the Asia-Pacific Economic Cooperation (APEC)—used their time in Beijing to push for greater Chinese investment in their countries. The three leaders also backed a Chinese-led proposal for a Free Trade Area of the Asia Pacific (FTAAP).

Peruvian President and Ollanta Humala and Chilean President Michelle Bachelet met with President Xi separately on Wednesday. In his meeting with Ollanta, the Chinese leader is reported to have proposed a bilateral trade agreement with Peru. The two leaders also reportedly signed a memorandum supporting the creation of a trilateral group with Brazil to plan the construction of a rail link between Peru and Brazil.

While Bachelet left China empty handed in terms of signed agreements, she made her objectives clear. “We have a high level of trade, but we have not made any progress in investments,” she said at a meeting with Chinese Prime Minister Li Keqiang on Monday. However, both Xi and Bachelet expressed confidence that the establishment of a Chilean branch of the China Construction Bank next year will spur future Chinese investment in Chile.

In a sign that the relationship between China and Mexico may not have been seriously damaged by Mexico’s recent cancellation of a bid awarded to a Chinese consortium for the construction of a high-speed rail link, the Chinese leader and Mexican President Enrique Peña Nieto signed 14 separate agreements and investment contracts at a meeting yesterday. Peña Nieto also announced plans to create a joint fund between three Chinese companies and the Mexican oil company Pemex, with the goal of raising up to US $5 billion for energy projects in Mexico.